I haven't figured out the exact cause of this, but I think that it has to do with the limit creatures will fight away from the flag. When the flag is far away from the enemies it is causing the effect I believe.

Since this is not as simple as that to reproduce, I'm including my save game here. Loading the save will show the same as what is in the animation. It's hard to see the flag placement in the upper left corner because of the lighting, but the enemies are actually way across the map in the opposite direction.

So while I was trying to confirm a couple of old bugs I discovered this is still around. I've created a save file which can be loaded, and you'll see the behavior immediately nearby my dungeon structures. This is still true in 0.11.6 BT, and you can get the save game here: Save File

The situation is similar. There is a rally flag far away, but I placed it there in anticipation of a large army that had amassed due to a pathing issue which kept enemies spawned from the nearby portal from being able to reach me. A soon as a bridge is placed where I indicate below, all hell will break loose.

I noticed that as well, creatures are behaving like they've got epilepsy when Rally Flag is placed close to unreachable enemy. It's because they react to the enemy through the way to rally flag, not only when they reach RF, which of course it's awesome, but why do they got that shivers from? Cave-ins are best places to test this issue.

While you're looking at that save file, maybe you could see why there's a legion of enemies that spawn from that portal that are unable to path over to me. I wiped a couple times before I figured out how to beat that massive army. I've tried to reproduce it several ways, but couldn't so I haven't opened another bug thread. Maybe it also has to do with the length of the path?

This was a funny issue. Your save file was very helpful! The reason for the hang up was that you had a trench just next to the rally flag. The rally flag says to the creature to stand next to the flag in the trench. But then the rally flag cancels the job because the height between the rally flag and the trench is to big which means that the rally flag don't think the creature can "reach the job"...